One group of those involved in the present financial crisis has so far escaped notice--the economists. They are masters in the science of prediction, but as a group, if not to a man, they failed to predict a crisis that has wiped out nearly half the wealth invested in the stock market and elsewhere (measured of course from the peak). The economists did no better than their unscientific rivals, the stock pickers, who are in the business of prediction.

Perhaps we need a second look not merely at the existing models by which economists predict but at the very idea of prediction as the goal of social science. Economists had been in the habit of asserting that they had come a long way since the Depression, that such an event could not happen again. Yet people are now actually speaking of another Depression as possible. Maybe we know how to avoid the Depression we had, but what about a new one with a new character we do not recognize? Isn't our present crisis new? Isn't every crisis new--since surprise is the essence of crisis? If prediction were reliable, we would be prepared for every chance, and our lives would be crisis-free and much duller.

We can approach the idea of prediction by asking the economists a question they do not usually have to answer, which is this: In the present crisis is it better for citizens to spend or save? Or more generally, how do you economists recommend that we live?

To spend

Already, readers who are economists will have given their reflex response, which is to say that our goal is to predict, not advise. But we mustn't let them dodge the question in this seemingly modest way. It's not really modesty to proclaim a goal, fail spectacularly to achieve it, and then disclaim the consequences. What they did in advance of this crisis was to make available mathematical models that promised to predict the risks of certain investments but actually obscured those risks. Did not this bad prediction constitute a recommendation of such investments? Isn't this what is called "enabling"?

Let us set aside blame, and see how the economists, despite what they often say, do actually advise us, not merely on particular investments but also more generally on how to live. We know that economists are not politically neutral; they are all either liberal or conservative or in-between. Either their analysis is politically driven from the beginning or it just comes out as political in one direction or another. It doesn't matter which, because a certain analysis harmonizes with a certain politics. The same is true of morality; economists are not morally, any more than politically, neutral. The moral tendency of economics has to do with prediction itself, and it is common to liberal and conservative economists.